Quarterly report [Sections 13 or 15(d)]

Warrant Liability

v3.26.1
Warrant Liability
3 Months Ended
Mar. 31, 2026
Warrant Liability  
Warrant Liability

16.

Warrant Liability

In February 2023, the Company issued 39,100,000 warrants to purchase 19,550,000 common shares at $1.50 per whole common share for a term of three years.

The Company’s functional currency is the Canadian dollar and because the warrants are priced in U.S. dollars, a derivative financial liability was created (the “Warrant Liability”).  The Warrant Liability is recorded at fair value on the Company’s consolidated balance sheets and mark-to-market adjustments in fair value are recorded in earnings. Using Level 2 inputs of the fair value hierarchy under US GAAP, the liability created is measured and recorded at fair value using the Black-Scholes model as there is no active market for the warrants.

Activity with respect to the warrant liabilities is presented in the following table:

Feb-2023

Warrant Liability Activity

Warrants

December 31, 2025

1,541

Warrants issued

Warrants exercised

(4,336)

Warrants expired

(1)

Warrant liability revaluation loss (gain)

2,780

Effects of foreign exchange rate changes

16

March 31, 2026

There were no remaining warrants on March 31, 2026. The fair value of the warrant liabilities on December 31, 2025 was determined using the Black-Scholes model with the following assumptions:

Warrant Liability Assumptions

December 31, 2025

Expected life (years)

0.1

Expected volatility rate

58.2%

Risk free rate

2.6%

Expected dividend rate

—%

Exercise price

$ 1.50

Market price

$ 1.39

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